TLC deal to diversify revenue
19 November 2019
The Lines Company (TLC) has made a move to grow its metering subsidiary business FCL and bring in more revenue from outside the community.
TLC chief executive Sean Horgan today announced the purchase of Trustpower’s legacy metering assets. The assets will be purchased and managed by FCL, a wholly-owned TLC subsidiary specialising in metering and energy data. The decision will accelerate FCL’s planned growth and provide an immediate and substantial revenue stream, Horgan said. The acquisition will make FCL the third largest metering provider in New Zealand.
“Last year FCL made a strong contribution to TLC’s bottom line which adds to the amount we distribute back to the beneficiaries of our shareholder WESCT through discounts.”
“This deal accelerates FCL’s growth and has been agreed after extensive due diligence. The meters we have purchased from Trustpower are already in place and generating revenue and this purchase immediately increases the revenue and profit of FCL which is good for our community.”
The purchase will see FCL grow its meter fleet from 41,000 meters to around 140,000 on an ongoing basis. FCL already works with 45 retailers across New Zealand.
“The additional meters mean FCL would have the scale, technology, products and national footprint to drive the business forward,” Horgan said. “Ultimately it will boost the company’s relationship with electricity retailers.
More importantly, this is another step in growing TLC’s revenue sources outside core network assets. Around 80 per cent of FCL’s revenue will now be generated ‘off network’; meaning the majority of FCL’s profit will come from outside our network area and strongly support the discounts back to WESCT beneficiaries. Over time, our aim is that as many employment opportunities as possible be considered for our region. This will help our local community.
Trustpowers Simon Clarke said the sale allows Trustpower to continue to focus on its core strategic retail ambitions, whilst realising good value for the assets and a positive outcome for staff.
All of Trustpower’s existing metering staff have been offered roles within FCL.